- February 23, 2023
- Posted by: mwarren
- Category: Economy & Economics
Channelnomics’ 2023 Channel Forecast report highlights the latest in partnering dynamics.
By T.C. Doyle
The Channelnomics 2023 Channel Forecast report is now available.
This year’s report combines the best of Channelnomics’ annual Channel Chief Outlook study with its yearly partner Forecast report, providing readers with a unique 360-degree perspective of the IT channel. The report offers insights on budgeting trends, investment priorities, revenue expectations, product and service sales mixes, partner profitability, and more.
After tabulating results and analyzing the takeaways, Channelnomics concludes that vendors and partners alike are entering a post-pandemic economy that’s very different from the one that preceded it. While optimism remains high and opportunities abound, vendors and channel partners are adopting a “conserve and optimize” mindset. Vendors, for example, are focusing their resources on a smaller cadre of high-performing partners as they scale back channel budgets. Partners are investing less as they struggle with rising costs and fears of a brief but painful economic recession.
“The channel remains well-positioned to navigate this rocky road ahead, but only with a disciplined approach to conserving resources and optimizing operations to further the cause of improved efficiency, increased capacity, and expanded capability for all parties,” said Chris Gonsalves, chief research officer at Channelnomics and author of this year’s Channel Forecast report.
Channelnomics research also found a number of other takeaways, including these:
- Channel chiefs are working with reduced channel budgets even as growth expectations remain high.
- Vendors are generally more optimistic than partners.
- Solution providers and IT resellers have exhausted the pandemic era’s generous-but-ephemeral uptick in sales and expect leaner results and slower growth in 2023.
- The upheaval from 2020 to today accelerated the development and expansion of partners’ cloud and managed service practices.
Going into the study for this year’s report, Channelnomics was particularly keen to understand how vendor budgets that support channel go-to-market activities have changed over the past year or so. We found that 39% of vendors plan to increase their channel budgets this year, down from the 78% that budgeted increases just one year ago. Whereas just 16% of vendors planned no change to their budgets in 2022, 45% of vendors plan to hold their budgets steady this year, while the percentage of vendor organizations that said they’ll reduce their budgets nearly tripled year over year (to 16% in 2023 from 6% in 2022).
What makes these findings more notable is the fact that vendors expect the share of their sales through channels to increase and their direct sales to decline from 2022. How is this possible given the headwinds pressing against their budgets and agendas?
Again, the answer is twofold. Vendors are conserving resources and shifting their focus from recruiting the maximum number of partners possible to investing in a smaller cadre that have the greatest potential to drive new growth — i.e., existing partners that already have active lines of business with their products and services. Also, vendors are optimizing things such as channel automation technology stacks so they can better serve those they engage.
Partners, too, are making changes to their businesses — for example, by investing in their technological capabilities and sales capacities.
Read about all of this and more in the 2023 Channel Forecast report from Channelnomics. You can reserve your copy at channelnomics.com. If you’re a subscriber to Channelnomics IQ, formerly known as Brainstorm, you can find your copy in the Channelnomics IQ library.
T.C. Doyle is the vice president of strategic content at Channelnomics. Connect with him on LinkedIn at linkedin.com/in/tcdoyle.